Penta backs £60M managed data buy and build

HMT were delighted to advise the former management team of SpiriTel plc, led by Alastair Mills and Ronnie Smith, on the formation of a new communications Group, the Six Degrees Group, focussed on managed data services. This new Group has just completed its initial three acquisitions, UK Solutions, NetworkFlow and Protel. These have been funded by Penta Capital, which has led a fundraising round of £60 million for the new Group.

Having returned SpiriTel to profitability, the SpiriTel management team, led by Chief Executive Alastair Mills and CFO Ronnie Smith, executed a successful buy and build strategy with 12 acquisitions prior to the £37 million sale of SpiriTel to Daisy plc. The new Six Degrees Group has an objective of creating a new data centric reseller of converged business communications through a buy and build strategy. This has a clear strategy of providing three key managed data service elements – core, connectivity and overlay services.

The first three acquisitions provide a solid platform to grow the Group in these areas.

UK Solutions is a specialist provider of managed data solutions including co-location (from two bespoke data centres in Studley), and network services (managed connectivity), which is sold to co-location customers and which includes MPLS solutions.

Based in Crawley, NetworkFlow provides bespoke internet connectivity (sold as InternetFlow) and MPLS (wide area) network solutions (sold as EnterpriseFlow) that integrate its proprietary core with a considerable number of carrier partners. This is essentially providing high speed wan point to point and multi point access solutions

Protel provides high quality cost effective telecoms services to corporate customers, offering a wide range of inbound and outbound solutions to a predominantly blue chip customer base.

Alastair Mills commented:

“SpiriTel was one of the fastest growing voice companies in the UK before its acquisition last year. This was testament to a hugely talented and driven management team that delivered over 20% organic growth, through a recession, in a declining market. I am delighted to be working with the team again following our recent £60m fundraise.

The market trends identified by both analysts and end-user clients are the same: managed data services will continue to grow rapidly, driven by the demand for cloud connectivity and virtualisation. At SpiriTel we faced a challenge familiar in the market: we were a voice company trying to turn into a data company. This time, our Group is very firmly focussed on growing from a strong data services core: we’re starting with 15,000 square feet of datacentre space, a next generation network and a full suite of IP voice services. We are ideally positioned to capitalise on an exciting growth market.”

Ronnie Smith, CFO of the new Group commented:

“The three acquisitions provide us with a solid platform for the new Group, in a rapidly growing market. Having worked with the team on 9 acquisitions previously, their ability to deliver quality due diligence and pragmatic commercial advice for each acquisition was once again invaluable. We look forward to working with the team again in the near future”.